New strategy at AMD?

Tony Massimini, chief of Technology, Semico.

USA: There have been several key changes at the senior level at AMD. On Feb. 8, 2011, two senior employees stepped down. Bob Rivet, vice president and chief operations and administrative officer, and Marty Seyer, senior vice president of corporate strategy, have left the company. One month ago CEO Dirk Meyer was replaced by interim CEO Thomas Seifert. The Board of Directors has yet to name a permanent replacement for Meyer.

This appears to signal a change in strategy at AMD. The company has fallen behind Intel on the PC and enterprise fronts. But more significantly AMD had no real plan for pursuing the ultra-mobile space like Intel has, in particular netbooks, tablet PCs, and smartphones.

Intel has been focused heavily in these areas with Atom. Even if Intel gains only a small share of the smartphone market from the ARM-based processors, it is such a huge market that it is worth the effort. Intel is leveraging off of its netbook success with Atom. The bill of materials for a tablet PC is not that different. Intel has established a group specifically for netbook and tablet PCs. It is also leveraging off of the netbook with future Atom SoCs for embedded control applications. These are new markets that offer Intel additional growth over the traditional computing market.

AMD has nothing to match Intel on the low power mobile front. The Brazos platform is aimed at the netbook market and other low power mobile applications. But this is not expected to hit the market until mid-2011.

AMD’s current overall MPU roadmap looks compelling. But the key is to implement this roadmap on time just to keep pace with Intel. It is almost two years behind Intel in rolling out the 32nm process MPUs. Although one can argue that AMD running SOI wafers compensates for the performance difference of that one node. AMD needs to get more aggressive on process node migration.

It would appear that the changes at the top at AMD are to spur the company onto a more aggressive strategy. More changes are likely due at AMD. In the short term, these changes can be disruptive to the company’s business. In the long run, moving AMD more quickly on its current MPU roadmap and getting more aggressive on the mobile front will benefit the company.